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| | Taxes in Spain:
Corporate Income Tax (Impuesto de Sociedades): national
Spains standard corporate income tax rate is 35%. Companies with yearly sales of less than 8 million euros may qualify for certain tax incentives: - A tax rate of 30%, applicable to the first €120.000,- of taxable income.
- Accelerated depreciation of certain fixed assets.
- A 10% tax credit for investments and expenses in internet,information technology,and communications.
VAT Tax (IVA): national
The purpose of VAT is as a tax on end-consumers; businesses are generally entitled to deduct VAT borne against VAT charged.
Tax on Business Activity (IAE): local
As of 2003, this tax is waived for businesses that have a profit of under one million euros. This is an annual tax paid by businesses operating in the municipality. This tax rate depends on many factors, such as size and location of the business, the type of business, and number of employees.
Personal Income Tax (IRPF): national
Form 100 and related (104, 105 for returns).Filing period: January 1- June 30 of the following year. This tax applies if you are a resident. It is the standard "IRPF" income tax that most Spaniards pay.
The tax rates for 2005 (combining national and regional rates) are as follows. You pay different rates on different portions of your income. In other words, if you earn €20,000,- you pay the first €4000,- at 18%, the next €9800,- (13,800 - 4000) at 24%, and the final €6200,- (20,000 - 13,800) at 28%.
Non Residents Income Tax (IRNR): national.
Most nonresidents are required to file income tax because they own a property also have to file because a Spanish company has paid you dividends,or because you worked for a few months during the year in Spain.
Wealth Tax (impuesto sobre el patrimonio): regional.
Filing period: January 1 - June 30 of the following year.
Resident individuals pay wealth tax on their worldwide assets at the end of each year. Non residents are taxable on property situated in Spain. However, tax treaties may affect the application of this rule.
The wealth tax applies only to assets with a value above €170.000,- The tax rate starts at 0.2% and rises to 2.5% for estates with a value above €10.700.000,-
Inheritance and Gift Tax: regional.
This tax applies to the beneficiaries of the inheritance or gift. The tax is on assets received with a value over €8000,- Even if the beneficiaries are not residents of Spain, they must pay this tax when the assets or rights are located in Spain.
The tax rate starts at 7.65% and rises to 34% for assets with a value above €815.000,- If the beneficiary is a child (under age 18) of the deceased, then the tax rate on the assets is reduced to 5%.
VAT Tax ( IVA) national.
The Canary Islands, Ceuta and Melilla have a different rate.
The standard rate is 16%. Essentials (food,water,medicine) have a reduced rate of 7%.If youre a tourist, you can get a refund of this tax at a booth in the airport before you leave Spain by showing your receipts for over €90,- (including IVA).The €90,- doesnt have to refer to a single item but it does have to be on a single receipt.
Transfer Tax and Stamp Duty (Impuesto de transmisiones patrimoniales y actos jurídicos documentados): regional.
Filing period: Within 30 days of the transaction. This tax is for certain real estate and commercial transactions.It is paid by the purchaser or the beneficiary of the transaction.The rate starts at 0.5% (for commercial activities) and rises to 6% (for real estate transactions).
Property Tax (IBI): local.
Filing period: Varies depending on the municipality, but normally between September and November of each year. Each year,the municipality issues a property tax payment slip for all properties.
The tax is usually between 0.5% and 1.1% of the cadastral value (valor catastral) of your property,which is roughly 20 times lower than the market value.
Municipal Tax (basura): local.
Filing period: Varies depending on the municipality. This varies depending on where you live.Usually assessed per house or building.Sometimes the tax is combined with water consumption.
Motor Vehicle Tax (impuesto sobre vehículos de motor): local.
Filing period:Varies depending on the municipality,but normally between September and November of each year.This tax is based on the age and the power of the vehicle. The larger the city is the higher the tax.For an average car it is about € 80,- a year.
If your taxes are being withheld and you earn less than € 21.000,- you dont have to file.If you are a UK citizen,you must apply for certificate E101 to indicate that you will be a resident of Spain,and no longer subject to pay income tax in the UK. | |
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